By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The Japanese yen climbed to a two-week peak towards the greenback on Monday after a report mentioned the Financial institution of Japan is contemplating tweaking its yield curve management coverage to permit the 10-year Japanese authorities bond yield to rise above 1% when it concludes its assembly on Tuesday.

The report pushed the yen to 148.81 per greenback, its strongest stage since Oct. 17. The dollar, which has been on the defensive all day, was final down 0.4% at 149.065 yen.

Surging world charges have heightened strain on the BOJ, which kicked off its two-day financial coverage assembly on Monday, to vary its bond yield management coverage, through which it maintains a -0.1% short-term rate of interest goal and a 0% cap on the yield.

“If the BOJ doesn’t do something tomorrow, which I feel that is what economists anticipate, and simply wait till December, I feel the greenback jumps proper again versus the yen,” mentioned Marc Chandler, chief market strategist at Bannockburn International Foreign exchange in New York.

However with Monday’s motion, Chandler thinks Japanese intervention appears unlikely, though he famous that in the previous couple of weeks the BOJ has intervened within the bond market as a substitute.

“The important thing to intervention is extreme volatility and the BOJ has been saying this: that it is not focusing on a selected stage. In order that’s taking the magic away from the 150 mark,” he mentioned.

Except for the BOJ, market members are looking forward to rate of interest selections from the U.S. Federal Reserve and the Financial institution of England (BoE).

A slew of buying managers’ surveys, euro zone inflation and GDP knowledge, and U.S. nonfarm payrolls are additionally due for launch this week.

“If client knowledge domestically hadn’t been so robust final week, we would most likely be taking a look at a much bigger slide for the greenback, however markets are nonetheless discovering it fairly troublesome to low cost the resilience of the U.S. financial system,” mentioned Helen Given, FX dealer at Monex USA in Washington.

Analysts additionally pointed to the U.S. Treasury’s quarterly refunding announcement on Wednesday that might transfer each the bond and forex markets.

That comes as mounting deficits and a heavier rate of interest burden have considerably elevated the U.S. Treasury’s funding wants. For the reason that final announcement in August, borrowing charges have spiraled to their highest since 2006-07.

The was final down 0.4% at 106.11, after earlier falling to a one-week low of 106.06, damage by a pickup within the euro. The euro was final up 0.5% at $1.0615.

The U.S. Treasury on Monday introduced borrowing estimates of $776 billion for the fourth quarter, decrease than the $852 billion forecast introduced on July 31, resulting from expectations of upper receipts.

The dollar barely prolonged losses after the announcement.

Later this week, the Fed and BoE are each anticipated to maintain charges regular so, barring any surprises, the main target will probably be on the message from policymakers.

The pound was up 0.4% at $1.2164.

U.S. nonfarm payrolls knowledge on Friday can even be essential for expectations of the Fed’s fee hike path. Wall Avenue economists predict new U.S. jobs of 188,000 for the month of October, in line with a Reuters ballot.

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Foreign money bid costs at 3:31PM (1931 GMT)

Description RIC Final U.S. Shut Pct Change YTD Pct Excessive Bid Low Bid

Earlier Change

Session

Greenback index 106.1300 106.6000 -0.43% 2.551% +106.7100 +106.0600

Euro/Greenback $1.0614 $1.0565 +0.47% -0.93% +$1.0625 +$1.0547

Greenback/Yen 149.0600 149.6500 -0.39% +13.70% +149.8450 +148.8100

Euro/Yen 158.22 158.10 +0.08% +12.77% +158.9200 +157.7000

Greenback/Swiss 0.9016 0.9021 -0.04% -2.48% +0.9048 +0.9010

Sterling/Greenback $1.2163 $1.2123 +0.35% +0.59% +$1.2171 +$1.2090

Greenback/Canadian 1.3821 1.3872 -0.37% +2.01% +1.3872 +1.3814

Aussie/Greenback $0.6374 $0.6334 +0.68% -6.45% +$0.6384 +$0.6333

Euro/Swiss 0.9568 0.9535 +0.35% -3.30% +0.9583 +0.9526

Euro/Sterling 0.8725 0.8713 +0.14% -1.35% +0.8740 +0.8708

NZ $0.5842 $0.5809 +0.59% -7.98% +$0.5845 +$0.5805

Greenback/Greenback

Greenback/Norway 11.1400 11.1820 -0.24% +13.66% +11.1880 +11.1070

Euro/Norway 11.8289 11.8024 +0.23% +12.67% +11.8504 +11.7805

Greenback/Sweden 11.1409 11.1478 +0.61% +7.04% +11.1798 +11.1179

Euro/Sweden 11.8206 11.7487 +0.61% +6.02% +11.8377 +11.7729